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Home » Fintech lender LoanSnap expelled and faces financial and legal turmoil
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Fintech lender LoanSnap expelled and faces financial and legal turmoil

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Legal and financial problems pile up for fintech mortgage lender LoanSnapthe company having recently been evicted from its headquarters in the South California. The news had already been reported this week by TechCrunch.

TechCrunch reported Monday that although “LoanSnap has not yet closed its doors, according to two employees, the mood within the company is distressing as workers await clarity on the company’s future.” » The company allegedly failed to pay employees at least a month late. last year, while layoffs and attrition reduced its workforce from more than 100 to fewer than 50.

Founded by Karl Jacob and Allan Carroll in 2017, the company quickly took off after raising around $100 million in seed funding. Its investors included Virgo Groupled by British business magnate Richard Branson; Liquid 2 Companiesled by former NFL star Joe Montana; And LinkedIn co-founder Reid Hoffman.

It is “smart loans“, which were built using artificial intelligence technology, are designed to help homebuyers find the best mortgage for their unique financial situation. In May 2022, it launched a cloud-based portal, Loan Flowwhich gives mortgage brokers and loan officers the ability to originate loans anytime, anywhere.

But LoanSnap began experiencing financial difficulties in late 2022, TechCrunch reported. Since then, she has been the subject of legal action by at least seven creditors, including Wells Fargo“who collectively claimed the startup owed them more than $2 million.”

The report then notes that several complaints were filed against the company with the Business Improvement Officewhich gave LoanSnap a “F” rating.

Some complaints include allegations that the company charged nonrefundable fees but failed to close loans “in a timely manner” and failed to pay escrow taxes. Others accuse LoanSnap of selling already paid off loans, rather than closing the accounts, while “misleading consumers about mortgage approvals and short selling escrow accounts.”

In January 2024, Housing wire reported that LoanSnap had received a temporary cease and desist order of the Connecticut Department of Banking for widespread unlicensed mortgage origination activity. The regulator also accused the company of violations of the Truth in Lending Act and the Fair Credit Reporting Act.

The complaint alleges that for approximately three months in 2022, LoanSnap used individuals who were not licensed loan officers in Connecticut to solicit potential borrowers, collect mortgage loan applications and negotiate terms. Unlicensed LOs allegedly purchased leads from sites such as Loan tree to establish the first contact with consumers.

As for the eviction, TechCrunch reported that it stemmed from a lawsuit filed by its landlord in February 2024. The suit said LoanSnap owed more than $400,000 in unpaid rent. After failing to respond to the lawsuit, a judge entered a default judgment and the owner was allowed to move forward in May with eviction procedure on the offices the company rented in Costa Mesa, California.

The report also noted that another trial was filed last month with the New York State Supreme Courtalleging that LoanSnap owes $900,000 to a creditor.

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Revolutionizing the Crypto Payroll System for Fintech Startups

October 6, 2025

China’s financial rental group is making a significant investment of HK$86.7 million in cryptocurrency and AI.

October 6, 2025

Navigating Regulatory Challenges: Strategies for Fintech Startups in Asia

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